Financial Daily from THE HINDU group of publications
Wednesday, Apr 07, 2004
Industry & Economy
Textiles council hints at collective work to face post-quota milieu
New Delhi , April 6
AS textiles and clothing exporting developing countries' annual session gets under way, the declaration likely to be adopted by the International Textiles and Clothing Bureau (ITCB) is one of collective concern over the likely possibility of trade defence measures by importing countries once the quota regime is over and global trade in textiles and clothing gets integrated into the trading system of the World Trade Organisation.
Talking to Business Line here on the sidelines of the three-day conclave, the ITCB Chairman and India's Permanent Representative to WTO, Mr K.M. Chandrasekhar said, "One important development that could come in the post-quota environment is the possibility of trade defence measures such as anti-dumping. This is bound to increase in a number of countries. How we can prevent that and how we can collectively work together to exert pressure on restraining countries is one aspect the Council has been focussing on."
The second aspect, he said, is the important question of social corporate responsibility. There are a number of countries and industry associations particularly in Europe who are now working on some kind of standards such as labour or environmental standards, without their governmental interventions but on their own.
This new initiative by business is social corporate responsibility for developing guidelines and auditing system which could be applied to different exporting countries and different suppliers, he said adding that "what we need to do is to engage with different countries on the activities that are going on in importing countries" to impose new forms of protectionism in the garb of standards and guidelines.
He said the Council is also studying the residual issues pertaining to Agreement on Textiles and Clothing (ATC) such as carry-forward of quotas. Once the quota system goes, there would not be quota available, though in normal times the unutilised quotas are to be carried over for the next year by the exporting countries.
It is also looking at the role of ITCB in the post-quota environment as to how "we are going to work on refashioning ITCB in such a manner that it becomes increasingly relevant and important for all."
Stating that the developing countries had reached the present point only by standing together as individually "we could not have withstood protectionist forces," Mr Chandrasekhar said, "It is only by a collective effort that we were able to press on and with the restoration of multilateral control to the sector."
He cautioned that as the end of ATC's transitional period approaches, protectionism is coming back into the open and could be expected to escalate further. He recalled that during the trade negotiations under the Uruguay Round, some textile exporting countries got together and this was found so useful during the negotiations of ATC that it came in the form of an institutional inter-governmental arrangement both in drafting ATC and in fighting for the abolition of quota regime.
Mr Chandrasekhar said that there will be a communication issued which would be drafted over the next two days and it will be reflecting the need for genuine liberalisation of the sector rather than substituting one form of protectionism with another."
Pakistan's Deputy Permanent Representative to WTO Mr Nasim Quershi said that ITCB being a member-driven organisation, the message would reflect the collective concern against any form of new protectionism once the multi-fibre arrangement governing global trade in textiles and clothing is dismantled and free trade is brought in.
He hailed the positive response from the European Union, the US and Canada to the end of quota regime as they have issued notification for final integration of textiles trade into the WTO system. He said during the MFA regime importing countries had to make painful adjustments as their companies could not compete with imports."
The same is going to be the case with developing countries once the quota system is ended as some adjustments had to be made and ultimately in a free market we will be able to invest more and export more and that is going to be beneficial for all," Mr Quershi added.
Asked about the state of play in the global textile trade, the WTO Textile Monitoring Body (TMB) Chairman, Mr Andras Szepesi, remarked that "as a neutral Chairman, I am not well-placed to pronounce any judgement on the quality of implementation" of ATC in the transitional phase from 1995 to 2004.
However, he said, "Irrespective of the quality of implementation, the end of quota regime has reached a point of no return and in less than nine months, the agreement will be implemented in full and there would not be any quota regime. Competitive exporters including India will have a new era in the trading system after more than 40 years of a special and discriminatory regime."
He said that "overall there should be positives and a very good signal to the world that whatever has been promised as the most important segment of the Uruguay Round results after a painful implementation period of ten years will be there."
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